| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2014) 23 final (22.1.14) |
| Publication Date | 22/01/2014 |
| Content Type | Policy-making, Report |
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In a fast-evolving energy landscape characterised by the need to decarbonise our energy system, increasing global competition for resources and rising energy prices and price differentials with some of our main competitors, European economies and citizens require energy which is sustainable, affordable and with a secure and reliable supply. These objectives are the drivers of EU energy policy. However, today and in the near future, the EU is still facing a number of energy challenges including an increasing import dependency and related risks to security of supply, the completion of the internal energy market and the impact of energy prices on competitiveness. These challenges are particularly reflected in natural gas, which currently accounts for one quarter of the EU’s primary energy consumption and could contribute to the reduction of greenhouse gas emissions in the short to medium term, should it replace more carbon intensive fossil fuels. However, for the last two decades, the production from conventional reservoirs has steadily declined. The EU’s natural gas import dependency has risen up to 67% in 2011 and is projected to continue increasing, putting the EU in greater direct competition with global demand for natural gas. Some Member States rely on a single supplier and often on a single supply route for 80-100% of their gas consumption. High reliance on imports and low diversification of energy resources, among other factors, have contributed to increasing prices in the EU, in particular compared to some of our main competitors. Whilst still being lower than prices on some Asian markets, natural gas prices are three to four times higher than in the US. This puts pressure on EU energy-intensive industries using gas or possible by-products as feedstock. Technological progress has enabled access to unconventional fossil fuels that were previously technically too complex or too costly to extract. In the US, unconventional gas currently accounts for 60% of the domestic gas production with shale gas featuring the highest growth rates. This significant increase in indigenous natural gas production has resulted in lower gas prices in the US – and temporarily influenced prices of Liquefied Natural Gas imports into the EU - and made available cheaper US coal supplies for export, notably into the EU, where coal prices have plummeted by more than a third since 2011. Potential reserves of natural gas from shale formations have triggered high expectations also in parts of the EU: shale gas can be a possible substitute for more carbon-intensive fossil fuels, an indigenous source of natural gas reducing dependency on non-EU energy suppliers, as well as a possible driver of jobs, economic growth and additional source of public revenues. Accordingly, some Member States are actively pursuing shale gas exploration. At the same time, the risks - several of them with cross-border features - associated with the high volume hydraulic fracturing technique, also commonly referred to as "fracking", trigger concerns about public health and environmental effects. An important part of the population also perceives an insufficient level of precaution, transparency and public consultation in relation to shale gas activities. Some Member States have decided to ban hydraulic fracturing or establish moratoria. In this context, requests have been raised for EU action to ensure the safe and secure extraction of unconventional fuels. The European Parliament adopted two resolutions in November 2012 on environmental impacts as well as on industrial, energy and other aspects of shale gas and shale oil. In October 2013, the Committee of the Regions issued an opinion providing the perspective of local and regional authorities on unconventional hydrocarbons. Most respondents to a public consultation carried out by the Commission from December 2012 to March 2013 asked for additional EU action related to unconventional hydrocarbons (e.g shale gas) developments in the EU. In May 2013 the European Council called for the development of indigenous energy sources to reduce the EU’s external energy dependency and stimulate economic growth while stressing the need to ensure their safe, sustainable and cost-effective extraction and respecting Member States choices of energy mix. In response, the Commission agreed to develop a framework for safe and secure unconventional hydrocarbon extraction in the EU following the objectives: – to ensure that opportunities to diversify energy supplies and improve competitiveness can be safely and effectively taken up in those Member States that choose to do so, – to provide clarity and predictability for both market operators and citizens, including for exploration projects, – to fully consider greenhouse gas emissions and management of climate and environmental risks, including to health, in line with public expectations. Since 2012 the Commission has released a series of studies on unconventional fossil fuels, in particular shale gas, addressing especially potential energy market and climate impacts, potential risks for environment and human health, regulatory provisions applicable in selected Member States and the registration under REACH of certain substances potentially used in hydraulic fracturing. This Communication outlines the potential new opportunities and challenges stemming from shale gas extraction in Europe. It accompanies a Recommendation providing minimum principles for the exploration and production of hydrocarbons by means of high volume hydraulic fracturing. The objective of this Recommendation is to enable safe and secure development of these resources, and to foster a level playing field for this industry in all EU Member States that choose to develop them. |
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| Source Link | http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2014:023:FIN |
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| Subject Categories | Energy |
| Countries / Regions | Europe |
